Senate Republicans on Thursday objected to quick passage of legislation that would restore full deductibility of wagering losses after Nevada Democrat Catherine Cortez Masto made the unanimous consent request.
The bill from Cortez Masto would fix a provision enacted in the massive reconciliation package last week that would allow only 90 percent of gambling losses to be deducted against any winnings, estimated to raise $1.1 billion over a decade.
The provision would lead to situations in which gamblers would face taxes even if they broke even for the year, which Cortez Masto and other critics argue would kill tourism in Nevada and drive the industry offshore. The bill would repeal the 90 percent limitation and allow 100 percent of losses to be netted out against winnings, as in current law.
Without her fix, gamblers would be “literally paying taxes on money they don’t have,” Cortez Masto on the floor. “This makes no sense, and it will do irreparable harm to our country’s gaming industry if it takes effect, especially in Nevada.” She said it could push major industry events such as the World Series of Poker, occurring this week in Las Vegas, into other countries.
Cortez Masto’s bill has bipartisan support from Sen. Ted Cruz, R-Texas, as well as Jacky Rosen, D-Nev. A similar version offered by Rep. Dina Titus, D-Nev., has bipartisan backing in that chamber as well.
Cortez Masto claimed most Republicans didn’t even know it was in the bill they were voting on last week, saying it was included merely to comply with the Senate’s “Byrd rule” requiring every provision to have a budgetary impact.
But Sen. Todd Young, R-Ind., who said he supported the fix proposed by Cortez Masto, nonetheless objected unless Democrats agreed to modify their request to allow an amendment to restore a “qualified religious institution” exemption from the excise tax on university endowment income that was increased in the reconciliation law.
The law ended up raising the threshold to be subject to the endowment tax to schools with at least 3,000 tuition-paying students, though that wasn’t enough to protect the University of Notre Dame, in South Bend, Ind. Notre Dame, which bills itself as “inspired by its Catholic character to be a powerful force for good in the world,” would have qualified under the exemption for religious institutions.
Young said removing the religious exemption was another byproduct of the Byrd rule, which also frowns upon provisions that have only one or a small group of beneficiaries. Democrats raised the issue in the “Byrd bath” process, in which both parties are free to raise issues with the Senate parliamentarian that could run afoul of the rules and become subject to a 60-vote hurdle.
“As long as my Democratic colleagues are keen on fixing provisions” left out because of the Byrd rule, Young said, “I think it’s only fair that we fix this one as well.”
Senate Finance ranking member Ron Wyden, D-Ore., objected to Young’s request to modify Cortez Masto’s UC, arguing that Young’s fix would restore a “special carve-out for one institution, just one, in his home state.”
Young replied that the provision would aid religious institutions “across the country,” not just in Indiana. But without a deal to move forward with his amendment, Young objected to Cortez Masto’s initial request to pass her bill.
“I’m disappointed, but I am not done,” Cortez Masto said. “It is just common sense, and it has bipartisan support here in the Senate.”
Even if the chamber had passed her bill, it likely would have fallen victim to a House “blue slip,” as it would violate the Constitution’s requirement that revenue bills originate in the House. Titus said earlier this week that the blue slip issue makes any Senate action moot, and that the only solution is to take up her bill and move it through both chambers.
After the dueling objections Thursday, Titus said in a statement that the Senate’s “failure … is not surprising.”
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